ANZ National Bank Limited v Uruamo [2012] NZHC 1895 (26 July 2012)

Last Updated: 3 August 2012

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2012-404-4084 [2012] NZHC 1895

UNDER the Land Transfer Act 1952 Section 143

IN THE MATTER OF Caveat No. 9124150.1 and Caveat No.

9124150.2

BETWEEN ANZ NATIONAL BANK LIMITED Applicant

AND ERIAPA URUAMO Respondent

Hearing: 26 July 2012

Appearances: L A O'Gorman for Applicant

D V Murray for Respondent

Judgment: 26 July 2012

_{ORAL JUDGMENT OF ASSOCIATE JUDGE R M BELL}

Solicitors:

Buddle Findlay, P O Box 1433 Auckland ;1140, for Applicant

Email: [e-mail] / [e-mail]

Michael Kan, P O Box 105 228 Auckland 1143 for Respondent

Email: [e-mail]

Copy for:

Davina Murray, P O Box 1808 Auckland 1140 for Respondent

Email: [e-mail]

Case Officer: [e-mail]

ANZ NATIONAL BANK LIMITED V ERIAPA URUAMO HC AK CIV-2012-404-4084 [26 July 2012]

[1] The ANZ National Bank applies under s 143 of the Land Transfer Act to remove two caveats, 9124150.1 and 9124150.2. The caveator is Eriapa Uruamo. The first caveat is lodged against identifier NA130B/550. That property is called the “1331 block”. Caveat 9124150.2 is lodged against identifier NA97D/829, the “Lot 4 block”. The registered proprietor of both properties is Mr Barry Hart. They are rural properties at Reweti near the Woodhill Forest.

[2] The interest claimed under each caveat is the same. Each caveat says:

Pursuant to an access agreement in perpetuity for access to waahi tapu sites on all of certificate of title ... dated 30th April 2012 between the caveator Eriapa Uruamo as trustee and grantee and the registered proprietor as grantor.

[3] The caveats were lodged on 12 July 2012. Mr Uruamo says that he has caveated as “trustee for Te Taou tribe, Waimauku”. Each caveat was signed by counsel for the caveator. Mr Hart, the registered proprietor, witnessed her signature but it is clear from Mr Uruamo’s affidavit that he ratifies the lodging of the caveats.

[4] The ANZ National Bank Ltd has registered first mortgages over both properties. Its mortgages were registered in October 2008. As the holder of mortgages registered against the titles, the bank has standing to apply for removal of a caveat under s 143 of the Land Transfer Act: see Solomona v Solomona.[1]

[5] The applicant says that Mr Hart has defaulted in payments due which are secured by the mortgages. It says that it served notices on Mr Hart under s 119 of the Property Law Act and defaults under the mortgages have not been remedied. It says that it now holds accrued powers of sale under the mortgages. It also says that it entered into an agreement to sell the lot 4 block on 16 May 2012. That agreement originally had a settlement date of 25 June 2012, but the bank was not able to complete the sale because of other caveats lodged against the title. It applied to the court to remove those caveats but then Mr Uruamo’s caveats were later lodged. The

_{bank says that it did not know about the agreements referred to in the caveats before,}

and that it has not at any time consented to Mr Hart granting any rights of access over the land in favour of Mr Uruamo or Te Taou. It says that its rights as mortgagee take priority over any interest asserted by Uruamo and it is entitled to sell the land free of the interest asserted by Mr Uruamo.

[6] A bank officer has sworn an affidavit confirming these matters. Before the bank began realising its securities, Mr Hart’s indebtedness to the bank was said to be more than $30 million made up of debts under various loans. He has personal debts said to be more than $4 million. In addition, Mr Hart is said to have guaranteed the indebtedness of Malory Corporation Ltd to the bank under various loans. His liability as guarantor is said to have been more than $26 million. It seems that some properties secured to the bank have already been sold. Once those proceeds of sale have been taken into account, Mr Hart is still indebted to the bank for more than

$20 million.

[7] The bank says that as well as completing the sale of the lot 4 block, it intends to sell the 1331 property once it has entered into an agreement on suitable terms.

[8] Mr Uruamo does not take issue with the part of the bank’s case that goes to its security for Mr Hart’s indebtedness or the bank’s rights under its mortgage, although he is concerned at what might happen if the properties are sold. His fear is that a new owner of the properties might not respect the properties in the way he believes Mr Hart has respected their cultural significance.

[9] The bank has put forward an argument that, as registered mortgagee, it has priority over any interest that Mr Uruamo might assert. The argument it makes is along standard lines asserted by mortgagees in these cases. I will come to it later. There is first a preliminary question. That is whether Mr Uruamo has a caveatable interest in the property.

[10] The key provision is s 137 of the Land Transfer Act 1952:

137 Caveat against dealings with land under Act

(1) Any person may lodge with the Registrar a caveat in the prescribed form against dealings in any land or estate or interest under this Act if the person—

(a) claims to be entitled to, or to be beneficially interested in, the land or estate or interest by virtue of any unregistered agreement or other instrument or transmission, or of any trust expressed or implied, or otherwise; or

(b) is transferring the land or estate or interest to any other person to be held in trust.

(2) A caveat under this section must contain the following information: (a) the name of the caveator; and

(b) the nature of the land or estate or interest claimed by the caveator, which must be stated with sufficient certainty; and

(c) how the land or estate or interest claimed is derived from the registered proprietor; and

(d) whether or not it is intended to forbid the making of all entries that would be prevented by section 141 or a specified subset of them; and

(e) the land subject to the claim, which must be stated with sufficient certainty; and

(f) an address for service for the caveator.

(3) Caveats under this section must be executed by the caveator or the caveator's attorney or agent.

(4) Caveats under this section must be entered on the register as of the day and hour of their receipt by the Registrar.

[11] Both caveats refer to an access agreement in perpetuity for access to the property sites. An agreement to give access to a property could be simply an agreement to give a licence to enter onto land, or it could be something stronger - an easement. A licence does not grant an interest in land and is not caveatable. An easement is an interest in land, and it can support a caveat. The difference in this case is that as an interest in land, an easement may bind future owners of the servient tenement, whereas a licence does not. The caveat alleges access in perpetuity. That seems to show an intention to bind future owners. So the interests asserted under the caveats are potentially equitable easements by right of way.

[12] Section 291 of the Property Law Act 2007 recognises that there may be easements in gross. A dominant tenement is not required. An easement in gross encumbers the land of the grantor – that is, the servient tenement - and it can bind the successors in title of the original grantor.

[13] Under s 8(5), the Property Law Act applies to land registered under the Land Transfer Act. That means that an easement in gross is capable of registration under the Land Transfer Act. So an agreement to grant an easement in gross does qualify as an interest under s 137(1)(a) of the Land Transfer Act.

[14] To establish a caveatable interest, a caveator needs to show an arguable case for the existence of the caveatable interest claimed. On a caveat application (such as under s 143) the court does not decide finally the merits of a claimed interest in land. Under that summary procedure, a caveator only needs to establish that it is reasonably arguable that the caveator has the interest claimed under the caveat.

[15] Mr Uruamo’s affidavit confirms that he is the caveator and that he lodged the caveats. He says that he opposes the order for removal of the caveats because the land contains an urupa and waahi tapu. He says that he is a trustee for the Te Taou tribe. He has attached to his affidavit a 31-page document which gives historical information about Te Taou and its connection with the south Kaipara area in general, and with Reweti in particular. It shows connections with the land said to be in Mr Hart’s ownership. Mr Uruamo asks the court to leave the caveats in place until the waahi tapu and urupa located on Mr Hart’s properties have the necessary protection for his tribe. He says that the sacred areas include the best preserved pa sites, urupa and waahi tapu within the district of the former Rodney District Council. He says that he has known Mr Hart for approximately 15 years and during that time Mr Hart has been a custodian of the property for his tribe. He says:

The relationship I have with Barry has provided me with the security that my people and future generations will have no restricted access to the areas of land that are sacred to us.

[16] I think that by “no restricted” he means “unrestricted” access. He says that Mr Hart has maintained the land consistently with the principles of the Treaty of Waitangi. He has not developed or carried out any development over the waahi tapu

or urupa. He says that Mr Hart has acted consistently with the principles of stewardship. He says that Mr Hart has preserved extensive wetlands, reserves and an ancient pohutukawa tree which is considered a taonga tuku iho. He cannot be assured that a future owner will operate consistently with the principles of the Treaty of Waitangi. He asks the court to recognise its importance by protecting his tribe’s interest in the land.

[17] The evidence is consistent with Mr Hart giving protection to sites of cultural significance to Te Taou, and consistent with Mr Hart having allowed Te Taou to have access to his properties to visit these sites of cultural significance. But Mr Uruamo’s evidence says nothing at all about any agreement made on 30 April

2012.

[18] Under s 25 of the Property Law Act, any grant of a legal or equitable interest in land must be in writing and signed by the person making the disposition. Under s 24 of the Property Law Act an agreement for the disposition of land is not enforceable unless it is in writing, or its terms are recorded in writing.

[19] If Mr Hart had entered into a binding agreement with Mr Uruamo to confer access to Te Taou in perpetuity, I would expect that agreement to be in writing. If it was not in writing, I would expect there to be evidence as to the making of that agreement and an explanation why that agreement was not reduced to writing. But, as it is, Mr Uruamo’s affidavit contains no evidence as to any agreement made on

30 April 2012. No agreement of that date is attached to his affidavit. There is no evidence explaining why the agreement cannot be exhibited or, if it was not in writing, why it was not written and when and where the agreement was entered into.

[20] The respondent’s evidence is not sufficient to establish an arguable case for

the agreements referred to in the caveats.

[21] The matters claimed in Mr Uruamo’s affidavit are different from the interests stated in the caveats. Mr Uruamo’s case has been presented on the basis that Te Taou have interests in the land, independently of any agreement made with Mr Hart. As I understand the argument, it is that these waahi tapu and the urupa in particular

are subject to customary claims that originated in antiquity and which subsist until today. The problem is that that is not the claim made in the caveats.

[22] An order can be made sustaining a caveat only if the evidence supports the interest claimed in the caveat. I am concerned only with whether Mr Uruamo or Te Taou has an interest of the sort claimed in the caveats. The evidence does not support the interest claimed in the caveats. That is a real problem for the interests claimed by Te Taou.

[23] On caveat applications, if a caveator can show an arguable case for an interest in the land that is different from that claimed under a caveat, the courts may consider whether to grant leave under s 148 to lodge a fresh caveat. Accordingly, I consider whether Mr Uruamo’s claims to customary ownership of part of the land give rise to a caveatable interest, in case there is a basis for granting leave under s 148 of the Land Transfer Act. I need to state at the outset that this is a question of property law. That is because the arguments for Mr Uruamo rely on provisions of other statutes. The provisions in other statutes go to restrictions on land use. But that legislation does not go to property law. Mr Uruamo has referred to the Historic

Places Act 1993, the Resource Management Act 1991,[2] and to the Treaty of

Waitangi Act 1975. But none of these matters go to questions of property law. In this case, the property issues are decided under the Land Transfer Act.

[24] The properties in this case are general land under s 129(1)(d) of Te Ture Whenua Maori Act 1993. In particular, they are not Maori customary land and they are not Maori freehold land. They are registered under the Land Transfer Act and, as such, are subject to the indefeasibility provisions of that Act. This is important. Once land is brought under the Land Transfer Act, any customary rights will have been extinguished. Attorney-General v Ngati Apa[3] recognised that customary rights can be extinguished. A number of judgments in that case refer to the customary rights and the ways that they can be extinguished. The case is important because the

court held that in that particular case the normal means of extinction of rights had not

_{applied. When it comes to land, customary rights can be extinguished by the land}

being converted into Maori freehold land, by the land being acquired by the Crown, by Crown grant, and by registration under the Land Transfer Act.[4]

[25] I do not know the full history of the properties or how they passed out of Maori ownership, or how they came under the provisions of the Land Transfer Act. But as the land has become general land and is under the Land Transfer Act, the registered proprietor has an indefeasible title under the Land Transfer Act.

[26] The bank has referred to the indefeasibility provisions of the Act, in particular sections 62, 63 and 75. The key provision is s 62:

62 Estate of registered proprietor paramount

Notwithstanding the existence in any other person of any estate or interest, whether derived by grant from the Crown or otherwise, which but for this Act might be held to be paramount or to have priority, but subject to the provisions of Part 1 of the Land Transfer Amendment Act 1963, the registered proprietor of land or of any estate or interest in land under the provisions of this Act shall, except in case of fraud, hold the same subject to such encumbrances, liens, estates, or interests as may be notified on the folium of the register constituted by the grant or certificate of title of the land, but absolutely free from all other encumbrances, liens, estates, or interests whatsoever,—

(a) Except the estate or interest of a proprietor claiming the same land under a prior certificate of title or under a prior grant registered under the provisions of this Act; and

(b) Except so far as regards the omission or misdescription of any right of way or other easement created in or existing upon any land; and

(c) Except so far as regards any portion of land that may be erroneously included in the grant, certificate of title, lease, or other instrument evidencing the title of the registered proprietor by wrong description of parcels or of boundaries.

[27] That means that the registered proprietor holds the land free of interests that existed before the registered proprietor took title, but are not recorded on the register. It means that the registered proprietor holds the land free of any unregistered customary interests in the land.

[28] It is necessary, for completeness, to refer to one exception in s 62. Section 62 creates an exception for the omission or misdescription of any right of way or other

easement created in or existing upon any land. In Sutton v O’Kane,[5] the Court of Appeal held that s 62(b) does not apply to an equitable interest created after the land has been brought under the Act.[6] Here, the interest that Mr Uruamo is claiming for Mr Hart is at best an equitable interest created after the properties were brought under the Land Transfer Act. To the extent that Mr Uruamo is relying on any easement granted by Mr Hart, section 62(b) cannot apply to give that interest priority ahead of the interests of the bank as registered mortgagee.

[29] I refer to some of the other legislation that Mr Uruamo has relied on.

[30] He referred to the Historical Places Act. That Act makes it unlawful to destroy, damage or modify an archaeological site without having obtained the appropriate consent under that Act. The Act restricts activities carried out on land insofar as they disturb archaeological sites. Waahi tapu and urupa may be archaeological sites under the Historic Places Act 1993 and may be entitled to protection under that Act. Those restrictions on the use of land where archaeological sites are located do not go to the ownership of the land. Those restrictions endure, notwithstanding any change of ownership. In other words, they do not affect the ownership of the land, because any new owner will take the land subject to the restrictions under the Act.

[31] The same approach applies to the Resource Management Act. Section 9 restricts any use of land contrary to rules in plans made under that Act. It is common to find rules in both district plans and regional plans that prevent activities on land that may affect waahi tapu and urupa. I accept that there may be rules made by the former Rodney District Council or the former Auckland Regional Council which could affect earthworks on the properties in this case. Even so, restrictions under rules in plans made under the Resource Management Act bind the owner of the land, no matter who the owner is. By and large the provisions of the Resource Management Act, no more than the provisions of the Historic Places Act, do not

_{declare or create property interests in land.}[7]

[32] Mr Uruamo has also referred to Te Ture Whenua Maori Act 1993. By and large, Te Ture Whenua Maori Act is concerned with the retention of land in Maori ownership, especially Maori freehold land.[8] It has little to say about general land owned by non-Maori.

[33] The bank has referred to s 338 of Te Ture Whenua Maori Act 1993. That section allows the chief executive of Te Puni Kokiri to set apart land, as Maori reservation, any Maori freehold land or any general land that is a waahi tapu, a place of special significance according to tikanga Maori. The Maori Land Court has associated powers to make vesting orders under that section. There is no evidence that powers under s 338 of Te Turi Whenua Maori Act have been applied to the properties in this case. A caveat interest protects an existing interest in land. It cannot protect a potential interest in land, or an interest to be created at some later date. So even if it were arguable that the properties might be later declared to be Maori reservations under s 338 of the Act, that does not now give a caveatable interest.

[34] It was pressed on me that the court should make use of s 61 of the Te Ture Whenua Maori Act 1993 and that I should state a case for the Maori Appellate Court. Section 61 says:

61 High Court may state case for Maori Appellate Court

(1) Where—

(a) Any question of fact relating to the interests or rights of Maori in any land or in any personal property arises in the High Court; or

(b) Any question of tikanga Maori arises in the High Court,—

that Court may state a case and refer the same to the Maori Appellate

Court.

(2) The Maori Appellate Court shall—

(a) Consider any case referred to it under subsection (1) of this section; and

(b) Transmit a certificate of its opinion on the matter to the High

Court.

(3) The High Court may refer back any case to the Maori Appellate

Court for further consideration.

(4) Subject to subsection (3) of this section, where the High Court has stated a case for the opinion of the Maori Appellate Court on any question of tikanga Maori, the opinion of the Maori Appellate Court on that question shall be binding on the High Court.

[35] The powers of the Maori Appellate Court are to decide any question of fact relating to the interests or rights of Maori in any land or in any personal property and also to decide any question of tikanga Maori. “Land” includes general land. I will assume for this judgment that if asked the Maori Appellate Court might find that the places of cultural significance in Mr Uruamo’s affidavit do constitute waahi tapu, and would be entitled to recognition and protection under tikanga Maori. Even so, I have to apply the Land Transfer Act regardless of any favourable findings of fact on those questions by the Maori Appellate Court.

[36] Stating a case for the Maori Appellate Court does not serve any useful purpose because, even with favourable findings of fact, the law to be applied is under the Land Transfer Act. Other provisions of the Te Ture Whenua Maori Act

1993 will not assist Mr Uruamo in asserting claims against this land.

[37] Mr Uruamo refers to a claim being heard in the Waitangi Tribunal. It appears from the 31-page document that a claim has already been made in the Waitangi Tribunal, which gave rise to the “South Kaipara Report”. That report has not been produced to the court but I cannot help asking myself whether any recommendations made in that report may also have been for the benefit of Te Taou as well as other claimant groups. Even so, if Te Taou is still able to make an independent claim to the Tribunal, the Tribunal would not be able to make any recommendations that the land in this case be the subject of relief under the Treaty of Waitangi Act. That is because the provisions of the Treaty of Waitangi Act make it

clear that private land may not be the subject of recommendations.[9]

[38] In short, the matters relied on by Mr Uruamo under the Historic Places Act, the Te Ture Whenua Maori Act, the Resource Management Act and the Treaty of Waitangi Act do not assist Mr Uruamo in showing that he has in law any property interest that can be protected by caveat under s 137 of the Land Transfer Act. Customary rights originating in antiquity have now been long extinguished in law and no longer subsist in that land. They do not help Mr Uruamo in a claim for a caveatable interest in the land.

[39] Those findings mean that there would not be any basis for giving leave for Mr Uruamo to lodge any fresh caveats. They also mean that there is a basis for immediate removal of the caveats.

[40] It then becomes unnecessary to consider the separate claim that the bank has priority in any case, but I go on to consider that, in case it is held that I have erred in holding that Mr Uruamo does not have a caveatable interest.

[41] The bank’s mortgages were registered in October 2008, before Mr Uruamo lodged his caveats. Mr Uruamo does not allege that the bank consented to the grant of any interest in the land to him. There is no evidence that the bank did consent to any caveatable interest in favour of Mr Uruamo.

[42] When a bank exercises a power of sale under a mortgage, it transfers the land free and discharged from all liability on account of the mortgage or of any other estate or interest, except as provided in s 105 of the Land Transfer Act:

105 Transfer by mortgagee

Upon the registration of any transfer executed by a mortgagee for the purpose of exercising a power of sale over any land, the estate or interest of the mortgagor therein expressed to be transferred shall pass to and vest in the purchaser, freed and discharged from all liability on account of the mortgage, or of any estate or interest except an estate or interest created by any instrument which has priority over the mortgage or which by reason of the consent of the mortgagee is binding on him.

[43] The exceptions are the estate or interest created by any instrument which has priority over the mortgage or which binds the mortgagee by reason of its consent.

[44] The bank has cited Zambuto v Kensington Park Holdings Ltd, Chen v ANZ National Bank Ltd, Westpac New Zealand Ltd v Set Kien Law.[10] Those are authorities for the bank’s priority and right to transfer free of subordinate interests under s 105.

[45] There is also authority for removing a caveat under the approach taken by the Court of Appeal, even when a caveator establishes an arguable case for the interest claimed: see Pacific Homes Ltd (In Rec) v Consolidated Joineries:[11]

We are of the view that in the dictum in Sims v Lowe Somers and Gallen JJ were concerned with the situation which was then before the Court and were not putting their minds to a situation in which there is no practical advantage in maintaining a caveat lodged by someone who could properly claim a caveatable interest. In such circumstances, the Court retains a discretion to make an order removing the caveat, though it will be exercised cautiously. An order will be made for removal only where the Court is completely satisfied that the legitimate interest of the caveator will not thereby be prejudiced. If, on the facts of a case, it can be seen that the caveator can have no reasonable expectation of obtaining benefit from continuance of the caveat in the form of the recovery of money secured over the land or specific performance of an agreement or if the caveator’s interest can be reasonably accommodated in some other way, such as by substituting a fund of money under the control of the Court, then it may be appropriate for the caveat to be removed notwithstanding that the right to the claimed interest is undoubted.

...

[46] That decision recognises that the court has a discretion to order removal of a caveat, even if the caveator has a caveatable interest. The discretion is to be exercised cautiously. One case is if it is clear that no useful purpose at all would be served by sustaining a caveat. When a mortgagee is to exercise a power of sale it is recognised that a legitimate caveat ought to be removed to allow the power of sale to be exercised. That removal is usually conditional on the caveat only being removed when a transfer is presented for registration in the exercise of a power of sale under a mortgage.

[47] The bank has proposed that the caveats should be removed on that basis in this case. While it might be possible to order the immediate removal of the caveats,

_{as the bank proposes only that the caveats be removed when it sells the properties,}

I am content to make an order for removal on that basis. I accordingly make an

order for removal of the caveats in the terms proposed in the bank’s draft order.

[48] Ms Murray seeks a stay. She says that she has instructions to appeal against the decision. I do not make any order for stay at the moment. I wish to hear

_{argument from both sides. I shall hear that tomorrow, 27 Jul 2012, at 3:45pm.}

R M Bell
Associate Judge

---

[1] Solomona v Solomona [2012] NZHC 1195.
[2] Section 6(e) - the recognition and provision for the relationship of Maori with ancestral lands, waahi tapu and taonga; and the principle of katiakitanga under s 7.

[3] Attorney-General v Ngati Apa [2003] 3 NZLR 643 (CA).

[4] Te Roroa Whatu Ora Custodian Ltd v Kereopa [2012] NZHC 1052 at [20]- [21].
[5] _{Sutton v O’Kane [1973] 2 NZLR 304 (CA).}
[6] _{Ibid, per Wild CJ at 315, Turner P at 319 and Richmond J at 350.}

[7] Except for limited exceptions under the Resource Management Act such as restrictive covenants under s 108(2)(d), bonds under s 109 and consent notices under s 221.
[8] Te Ture Whenua Maori Act 1993, s 17. See also the Preamble and s 2(2).

[9] Treaty of Waitangi Act 1975, s 6(4A).

[10] Zambuto v Kensington Park Holdings Ltd (2010) NZCPR 395, Chen v ANZ National Bank Ltd

_{[2012] NZHC 1083, Westpac New Zealand Ltd v Set Kien Law [2012] NZHC 1065.}

[11] Pacific Homes Ltd (In Rec) v Consolidated Joineries [1996] 2 NZLR 652 at 656.